Kara Ries, Tammy Bax, and Joe Thomas invested $30,000, $46,000, and $54,000, respectively, in a partnership. During its first calendar year, the company earned $361,500. 

Prepare the entry to close the December 31 Year-End Business Summary of Income account and allocate the $361,500 of net income to the partners under each of the following separate assumptions: 

1) The partners do not agree on the revenue and loss sharing method. 

2) The partners agreed to share the profits and losses in the proportion of their initial capital investments. 

3) Partners agreed to share revenue and loss by providing annual salary awards of $35,000 to Ries, $30,000 to Bax, and $42, 000 to Thomas; grant an interest of 10% on the initial capital investments of the partners; and dividing the rest equally.

Answer rating: 100% (QA)

situation 1 Date Account debit credit Income summary 361500 Kara ries capital 361... View the full answer